Citigroup announced on Thursday its agreement to sell its consumer banking operations in Thailand, Malaysia, Indonesia and Vietnam to United Overseas Bank (UOB) for approximately US$2.97 billion.
UOB stated that as part of the agreement, it will acquire Citi’s retail deposit divisions, loan portfolios and wealth management, in the four countries consumer banking sectors.
“We are excited to announce this transaction with UOB, a leading pan-Asian institution,” Citi Asia Pacific CEO Peter Babej said. “We are confident that UOB, with its strong culture and broad regional ambitions, will provide excellent opportunities and a long-term home for our consumer banking colleagues in Indonesia, Malaysia, Thailand and Vietnam.”
According to UOB, the company had about 2.4 million customers and a net worth of approximately $2.97 billion as of June 30, 2021.
UOB shares rose 1.23 percent following the announcement announced on Friday afternoon.
“The sale of these four consumer markets, along with our previously announced transactions, demonstrate our sense of urgency to execute our strategic refresh, said Citi CFO Mark Mason. “We are committed to working in the best interests of our shareholders by focusing our resources on businesses that can deliver growth, as well as increasing the capital we return to shareholders over time.”
Although it is selling its retail operations, Citi will continue to own and operate its institutional operations in Vietnam, Thailand, Malaysia and Indonesia, CNBC reports.
Last year, Citi CEO Jane Fraser stated that the bank planned to sell its retail business in 13 countries, excluding the United States, in order to increase returns. Many of these markets are in the Asia-Pacific region, including India, China, Indonesia and Australia.
Citi also announced last year it has decided to sell its financial services operations in Australia and the Philippines. Consumer banking in South Korea would come to a close as well.
“Focusing our business through these actions will facilitate additional investment in our strategic focus areas, including our institutional network across Asia Pacific, driving optimal returns for Citi,” Babej said.
The acquisition will allow UOB, Southeast Asia’s third-largest lender, a stronger presence in the area. After the transaction is completed, Citigroup predicts approximately 5,000 workers would transition to UOB.
Citi anticipates that the transaction will be completed between mid-2022 and early 2024, depending on the progress and completion of regulatory clearances.